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IMPORTS of sawn timber have grown 30% in the past two years, creating a temporary threat to Australia's domestic sawn timber industry, research by industry analysis firm BIS Shrapnel revealed on Wednesday.

The research showed that while imports of sawn timber grew substantially between 2009 and 2011, imports were still well below historical import levels seen about 20 years ago.

Based on a survey of builders, timber merchants and other end-users of sawn timber, the report also forecast demands for the product in Australia would rise sharply on the back of predicted growth in housing and construction.

Average annual domestic demand for sawn timber is forecast to increase from 4.9 million to 5.4 million cubic metres between 2012 and 2015, and rise again in the decade to 2026, from 5.4 million to 5.7 million cubic metres. This is compared to demand in 2011 of only 5.1 million cubic metres.

Report author Bernie Neufeld said while domestic production would range between 4.5 million and 5.2 million cubic metres of sawn timber; it would not be enough to meet projected demand.

"Unless domestic capacity is significantly increased to meet projected demand then imports will likely rise again over the long term," he said.

Mr Neufeld said his report suggested there was potential for domestic growth in new timber mills and "a need to expand the plantation resource to allow this to happen".

"There will still be a requirement for imports, and a constraint on exports, unless the plantation resource and industry capacity is increased," he said.